G-III Apparel (GIII) - 2024 Q4 - Annual Results

Executive Summary & Business Highlights This section outlines the company's strategic execution in fiscal 2024, focusing on brand growth and financial strength CEO's Statement and Strategic Overview The CEO highlights strong fiscal 2024 profitability driven by owned brands, a solid financial position, and strategic growth initiatives for fiscal 2025 - Penetration of higher-margin, owned brands (DKNY, Karl Lagerfeld, Vilebrequin) increased to 47% of fiscal 2024 net sales, up from 40% in the prior year[4] - The company ended fiscal year 2024 in a net cash position of $90.0 million with over $1.0 billion in liquidity[4][6] - New growth initiatives for fiscal 2025 include the successful launch of the Donna Karan brand and the development of Nautica, Halston, and Champion outerwear[4] - Future plans involve significant investment in global marketing, talent, and technology to support brand launches and enhance operational capabilities[4] Results of Operations This section details the company's financial performance for the fourth quarter and full fiscal year 2024 compared to the prior year Fourth Quarter Fiscal 2024 Fourth quarter sales declined, but profitability significantly improved from a net loss to a net income, absent a prior-year impairment charge Q4 Fiscal 2024 vs. Q4 Fiscal 2023 Performance | Metric | Q4 FY2024 | Q4 FY2023 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $764.8M | $854.4M | -10.5% | | Net Income (Loss) | $28.9M | $(261.1)M | N/A | | Diluted EPS | $0.61 | $(5.54) | N/A | | Non-GAAP Diluted EPS | $0.76 | $0.41 | +85.4% | - The prior year's fourth-quarter results included a substantial non-cash goodwill impairment charge of $291.5 million, net of tax, or $6.19 per share[5] Full-Year Fiscal 2024 Full-year sales decreased modestly while net income recovered strongly from a prior-year loss, complemented by a 27% reduction in inventories Full-Year Fiscal 2024 vs. Fiscal 2023 Performance | Metric | FY 2024 | FY 2023 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $3.10B | $3.23B | -4.0% | | Net Income (Loss) | $176.2M | $(133.1)M | N/A | | Diluted EPS | $3.75 | $(2.79) | N/A | | Non-GAAP Diluted EPS | $4.04 | $2.85 | +41.8% | - Inventories decreased by 27% compared to the end of the prior fiscal year[6] Outlook This section presents the company's financial guidance for the upcoming first quarter and full fiscal year 2025 Fiscal 2025 Full-Year Guidance The company projects fiscal 2025 net sales of approximately $3.20 billion, with net income guidance reflecting significant marketing investments Fiscal 2025 Full-Year Guidance | Metric | FY2025 Guidance | FY2024 Actual | | :--- | :--- | :--- | | Net Sales | ~$3.20B | $3.10B | | Net Income | $167.0M - $172.0M | $176.2M | | Diluted EPS | $3.50 - $3.60 | $3.75 | | Non-GAAP Net Income | $167.0M - $172.0M | $189.8M | | Non-GAAP Diluted EPS | $3.50 - $3.60 | $4.04 | | Adjusted EBITDA | $290.0M - $295.0M | $324.1M | - The outlook includes approximately $60.0 million in incremental expenses, with about 65% allocated to marketing for Donna Karan and DKNY[11] First Quarter Fiscal 2025 Guidance First quarter fiscal 2025 guidance anticipates slightly higher sales but projects a net loss compared to a profit in the prior-year quarter First Quarter Fiscal 2025 Guidance | Metric | Q1 FY2025 Guidance | Q1 FY2024 Actual | | :--- | :--- | :--- | | Net Sales | ~$615.0M | $606.6M | | Net Income (Loss) | $(5.0)M - $0.0M | $3.2M | | Diluted EPS | $(0.10) - $0.00 | $0.07 | | Non-GAAP Net Income (Loss) | $(5.0)M - $0.0M | $6.0M | | Non-GAAP Diluted EPS | $(0.10) - $0.00 | $0.13 | Financial Statements & Reconciliations This section provides key consolidated financial statements and reconciles GAAP results to non-GAAP performance measures Consolidated Financial Statements The fiscal 2024 statements show improved gross profit and operating income despite lower sales, alongside a stronger balance sheet Fiscal Year-End Statement of Operations Highlights (in thousands) | Metric | Year Ended Jan 31, 2024 | Year Ended Jan 31, 2023 | | :--- | :--- | :--- | | Net sales | $3,098,242 | $3,226,728 | | Gross profit | $1,241,847 | $1,101,137 | | Operating profit (loss) | $283,343 | $(109,462) | | Net income (loss) attributable to G-III | $176,168 | $(133,061) | Selected Balance Sheet Data (in thousands) | Metric | At Jan 31, 2024 | At Jan 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $507,829 | $191,652 | | Inventories | $520,426 | $709,345 | | Long-term debt | $417,833 | $619,358 | | Total stockholders' equity | $1,550,260 | $1,385,448 | GAAP to Non-GAAP Reconciliations Reconciliations adjust GAAP results for non-recurring items like asset impairments to provide a clearer view of core operational performance - Management provides non-GAAP measures to exclude items not indicative of core business results, such as asset impairments, acquisition-related expenses, and other one-time charges[23][26] FY2024 GAAP to Non-GAAP Net Income Reconciliation (in thousands) | Description | Amount | | :--- | :--- | | GAAP net income attributable to G-III | $176,168 | | Asset impairments | $6,758 | | Expenses related to Karl Lagerfeld acquisition | $6,115 | | Non-cash imputed interest | $3,798 | | One-time expenses (DKNY China) | $3,138 | | Other adjustments & tax impact | $(6,178) | | Non-GAAP net income attributable to G-III | $189,799 | Adjusted EBITDA Reconciliation (in thousands) | Metric | FY 2024 | FY 2023 | | :--- | :--- | :--- | | Net income (loss) attributable to G-III | $176,168 | $(133,061) | | Plus: Adjustments (Taxes, Interest, D&A, etc.) | $147,947 | $100,004 | | Plus: Other Non-GAAP Exclusions | $15,011 | $325,682 | | Adjusted EBITDA | $324,115 | $266,125 |